Financial Daily from THE HINDU group of publications
Monday, Jan 26, 2004
Financial Daily from THE HINDU group of publications Monday, Jan 26, 2004 |
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Mentor
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Management Columns - Manage Mentor Learn from history, else be condemned to repeat it
Dwijendra Tripathi, however, was not disheartened when, working in the IIM-Ahmedabad, he found that "there was little awareness about this branch of historical learning in the country". His researches are now available in The Oxford History of Indian Business from Oxford University Press (www.oup.com). The book aims "to provide an analytical understanding of the roots of modern business practices," concentrating primarily on the transition from mercantile capitalism to the industrial version. The intro informs that Europe produced the first work on company history in 1825 "in the shape of a centennial volume of Lauchhammer Iron Works". The author traces the phrase `business history' to Wallace B. Donham, Dean of the Harvard University, who emphasised the need for it in 1920. Trade and commerce were no strange occupations for the ancient Indian, nor was seafaring. Yet, in the absence of much recorded history on these, the author fast-forwards to the 18th century, when the country was predominantly agrarian. "The subcontinent was a congeries of scattered markets, instead of a single integrated theatre of transactions... All that India could boast of in the name of physical infrastructure were a few trade routes and riverways." Also, there were "highly organised groups of brigands and predators" rending the movement on Indian roads most hazardous. There is mention towards the end of Chapter 2 of Virji Vora "who remained a most powerful figure on the country's commercial horizon almost up to the end of the 17th century". When Shivaji raided Surat in 1644, "the Maratha warriors took away six barrels of gold, money, pearls, gems and other precious wares from his house." Vora recovered soon enough after the raid, and within a year his wealth hovered around Rs 80 lakh. A chapter devoted to the age of the agency houses deals elaborately with Thomas Parry of Madras and his varied business ventures till his death in 1824 at the age of 56, owing to cholera. Likewise, the book talks about Palmers of Calcutta, and Forbes of Bombay. "Agency house were partnership firms" because "neither Britain nor India had a general company law governing the formation and functioning of business firms at that time." They took "any business" that they could lay their hands on. They were trading houses, bankers, bill brokers, ship owners, insurance agents, surveyors, importers and exporters. The Western scenario paints the opium trade that flourished at the beginning of the 19th century, influx of Parsees into the city, the monopoly of banking business in the hands of Hindu and Jain shroffs, success of David Sassoon — a Jewish immigrant from Baghdad, and the used bottle trade that Jamsetji started with. `Senseless speculation' figures in a chapter titled `an insane interlude' and the key player is Premchand whose "real opportunity for amassing wealth came with the cotton crisis." He "floated a number of companies" and "like the proverbial Midas touch, his association with a firm was sufficient to turn a scrip into instant wealth." Believe it or not, "his recommendations for loans, sometimes written on scraps of paper in a most perfunctory manner, was a virtual directive that the bank officials could not refuse." If that is already gripping your attention, perhaps it is because there is something that history always teaches: Mistakes to avoid.
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